I can’t believe we didn’t post this at the time. Below is the House letter telling Obama that the Trans Pacific Partnership must have effective currency regime within it. A majority of the House signed it.
We at CPA have been delivering this message… even under the most optimistic assumptions of TPP benefit, it mathematically cannot be worth passing without including currency.
Japan’s average tariff on U.S. goods is 2-3%. The yen has devalued as much as 30% in the last six months. So…. let’s do the math. Exchange a possible 2.5% tariff benefit but get whacked by a 30% currency tariff?
Well… the “gross export zombies” may like it. But it doesn’t make sense. Because net trade matters, not gross exports. (Click here to see all 13 of our 21st Century Trade Agreement Principles).
Below is the June 6, 2013 press release from Rep. Michaud’s website.
WASHINGTON, DC – Today, 230 House lawmakers sent a bipartisan letter to President Obama urging him to address currency manipulation as negotiations over the Trans-Pacific Partnership (TPP) continue. The letter was led by Representatives Mike Michaud (D-Maine), John D. Dingell (D-Michigan), Sam Graves (R-Missouri), and Rick Crawford (R-Arkansas).
“Over the last couple years I’ve been in countless meetings with USTR and Treasury pressing them to include meaningful currency provisions in our trade agreements,” said Michaud. “To date they have done nothing. I’m hopeful this strong bipartisan letter convinces them to finally take action. American jobs are at stake.”
“Japan has a well-documented history of manipulating the value of the yen to help its exporters,” said Dingell. “We cannot allow this practice to continue if Japan is to enjoy the benefits of free trade with the United States. Strong and enforceable currency manipulation provisions must be included in TPP in order to prevent Japan from continuing in this market-distorting and unfair practice. I am proud to join with 229 of my Democratic and Republican colleagues in signing this letter and very much hope the Administration will take its message seriously.”
The full text of the letter sent to President Obama today can be found below:
June 6, 2013
President Barack Obama
The White House
Washington, D.C. 20500
Dear President Obama:
As the United States continues to negotiate the Trans-Pacific Partnership, it is imperative that the agreement address currency manipulation. Exchange rates strongly influence trade flows, and, in recent years, currency manipulation has contributed to the U.S. trade deficit and cost us American jobs. Incorporating currency provisions in the agreement will strengthen our ability to combat these unfair trade practices and help to create a level playing field for American workers, businesses, and farmers.
Undervalued exchange rates allow other countries to boost exports of their products and to impede exports of ours. They also contribute to trade imbalances and market access limitations that make it difficult for U.S. companies to compete in foreign countries. According to the Peterson Institute for International Economics, a minimum of one million American jobs have been shipped overseas as a result of currency manipulation alone. The consequences are not singular to the U.S.; misaligned currencies are distorting the entire global economy.
Despite U.S. efforts to address currency manipulation at the G-20, major currencies remain significantly undervalued. Including currency disciplines in the TPP is consistent with and will bolster our ongoing efforts to respond to these trade-distorting policies. It will also raise TPP to the 21st century agreement standard set by the Administration. More importantly, it will create a level playing field for American businesses and workers and prevent more U.S. jobs from being shipped overseas.
Thank you for your consideration of this letter. We look forward to working with you to address undervalued exchange rates in the TPP agreement.
Signers: Michaud, Dingell, Graves, Crawford, Aderholt, Andrews, Barber, Barletta, Barrow, Barton, Bass, Beatty, Becerra, Benishek, Bentivolio, Bera, Bishop, Rob, Bishop, Sanford, Bishop, Tim, Blumenauer, Bonamici, Brady, Robert, Braley, Brooks, Mo, Brooks, Susan, Brown, Corrine, Brownley, Burgess, Bustos, Butterfield, Capps, Capuano, Cárdenas, Carney, Carson, Cartwright, Castor, Chu, Cicilline, Clarke, Clay, Cleaver, Clyburn, Coble, Cohen, Collins, Chris, Connolly, Conyers, Cooper, Courtney, Crowley, Cummings, Davis, Danny, Davis, Rodney, Davis, Susan, DeFazio, DeGette, Delaney, DeLauro, DelBene, Deutch, Doggett, Doyle, Duckworth, Edwards, Ellison, Engel, Enyart, Eshoo, Esty, Farr, Fattah, Fitzpatrick, Fortenberry, Foster, Frankel, Fudge, Gabbard, Gallego, Garamendi, Gibson, Grayson, Green, Al, Green, Gene, Griffith, Morgan, Grijalva, Grimm, Gutierrez, Hahn, Harper, Hastings, Alcee, Heck, Denny, Higgins, Himes, Holt, Horsford, Huizenga, Hunter, Israel, Jackson Lee, Jeffries, Johnson, Bill, Johnson, Eddie Bernice, Johnson, Hank, Jones, Joyce, Kaptur, Keating, Kelly, Robin, Kennedy, Kildee, Kilmer, Kinzinger, Kirkpatrick, Kuster, Langevin, Larsen, Larson, Lee, Barbara, Levin, Lewis, John, Lipinski, LoBiondo, Loebsack, Lowenthal, Lowey, Lujan, Ben Ray, Lujan Grisham, Lummis, Lynch, Maffei, Maloney, Carolyn, Maloney, Sean Patrick, Marino, Markey, Matheson, Matsui, McCarthy, Carolyn, McCollum, McDermott, McGovern, McHenry, McIntyre, McKinley, McLeod, McNerney, Meehan, Meng, Miller, Candice, Miller, George, Moore, Gwen, Murphy, Patrick, Murphy, Tim, Nadler, Napolitano, Neal, Nolan, Norton, O’Rourke, Owens, Pallone, Pascrell, Pastor, Payne, Perlmutter, Peters, Gary, Peters, Scott, Peterson, Petri, Pingree, Pittenger, Pocan, Price, David, Quigley, Rahall, Rangel, Rogers, Mike (MI), Roybal-Allard, Ruiz, Runyan, Ruppersberger, Rush, Ryan, Tim, Sanchez, Linda, Sanchez, Loretta, Sarbanes, Schakowsky, Schiff, Schneider, Schrader, Schwartz, Scott, David, Scott, Bobby, Serrano, Sewell, Shea Porter, Sherman, Shimkus, Sinema, Sires, Slaughter, Smith, Adam, Smith, Lamar, Speier, Stutzman, Swalwell, Takano, Terry, Thompson, Bennie, Thompson, Glenn, Tierney, Titus, Tonko, Tsongas, Upton, Van Hollen, Vargas, Veasey, Visclosky, Walberg, Walz, Watt, Waxman, Welch, Whitfield, Wilson, Frederica, Wilson, Joe, Yarmuth, Yoder, Young, Don